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Inside this issue
Consumers Will Determine Future Powertrains, Fuels, Engineers Say
Ford Rating Boosted to Investment Grade
Jim Press: U.S. Dealers to Tap China Retail Market
China Ramps Up Auto Exports
Deadline Approaching for NADA's Dealership Workforce Study Participation
How the Fed Affects Your Life and Money
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
Consumers Will Determine Future Powertrains, Fuels, Engineers Say

Ford and Toyota, fierce competitors in the marketplace, agree customers ultimately will determine what future technologies can best wean the U.S. off imported oil. Speaking at the SAE World Congress [in Detroit], top automotive engineers describe the variety of technologies being explored, including hydrogen fuel cells, biofuels and electrification. But if customers don’t vote with their pocketbooks, such alternative fuels and powertrain options are doomed to failure, says Tom McCarthy, Ford’s chief engineer-engine research and advanced technologies.
Source: WardsAuto (subscription required)

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Ford Rating Boosted to Investment Grade

One of the three major credit-ratings agencies boosted Ford to investment grade on Tuesday, a key endorsement of the automaker's improved financial position despite a muddy outlook overseas. Fitch Ratings raised Ford's credit rating to BBB- from BB+, which can lead to lower borrowing costs and higher investor confidence. "The upgrade of Ford's ratings reflects the automaker's significantly improved financial performance, balance sheet repair, and product portfolio improvement that have taken place over the past several years," Fitch said in a statement.
Source: Detroit Free Press

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Jim Press: U.S. Dealers to Tap China Retail Market

Jim Press, the former Toyota and Chrysler executive turned China dealership guru, says it's only a matter of time before foreign dealers tap the world's biggest auto market. "Eventually that's going to be a consideration," Press said at the Automotive News China Conference [Tuesday.] "As they venture out globally, this will be a natural place for them to look," he said. "But it's going to take some time." Since September, Press has run dealerships in China for McLarty Automotive Partners as president of its international unit, which also includes operations in Mexico and Brazil. Press said McLarty is the only U.S. dealer group he's aware of in China. But he expects more to converge as the market matures.
Source: Automotive News (subscription required)

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China Ramps Up Auto Exports

More Car Makers Look Abroad for Sales as Domestic Capacity Begins to Outrun Demand.
China's auto factories are stepping up still-tiny exports as domestic growth slows, raising the stakes in global auto markets by heightening competition with local and foreign brands. Chinese-made vehicles now being shipped abroad aren't yet a threat to developed markets in the U.S. and Europe, where Made in China cars would face stiff consumer scrutiny. But the low-cost cars are making inroads in fast-growing emerging markets such as Africa, Asia and Latin America.
Source: The Wall Street Journal (subscription required)

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Deadline Approaching for NADA's Dealership Workforce Study Participation

Leaders from both the National Automobile Dealers Association and American Truck Dealers are asking members to take part in NADA’s new Dealership Workforce Study that will analyze employee compensation, benefits, turnover and other data. NADA and ATD member dealers have until May 2 to share their feedback, and the association emphasized there is no cost to participate in the study. “A higher number of dealers participating in the study will result in more detailed reports comparing data at the national, regional, state and metro levels,” [said Marilynn Youngs, senior director of NADA University.] To participate in the 2012 Dealership Workforce Study, visit www.nadaworkforcestudy.com. For more information or questions, contact Cynthia Cook with NADA University at (703) 821-7197 or ccook@nada.org.
Source: Auto Remarketing

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How the Fed Affects Your Life and Money

The Federal Funds Rate and Auto Loan Rates
Seeing great deals on auto loan rates? Don't bother calling Federal Reserve Chairman Ben Bernanke to say thanks. As with most consumer loans, auto loans are profoundly affected by Federal Reserve policy, but unlike credit cards or home equity lines of credit, auto loan rates don't move in lock step with the federal funds rate, says Paul Taylor, chief economist at the National Automobile Dealers Association. Instead, the Fed influences rates mostly through the buying and selling of short-term Treasuries on the open market, Taylor says. When the Fed buys Treasuries, rates on loans of similar maturities fall. To that end, the Fed has been buying Treasuries in the last few years to drive down rates. But the rates you'll ultimately see at the auto dealership aren't just reflective of Fed policy. They're also influenced by a complex cocktail of market forces, including the market's confidence that auto loans will get paid back, the resale value of used cars in case they don't and expectations about where inflation is headed, he says. All of those are pointed in borrowers' favor right now. "You know how people will talk about certain times when the stars are aligned? Well that's sort of how the economic variables have lined up during this recession," he says.
Source: Bankrate.com

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The NADA Story

The NADA story began in 1917 when 30 auto dealers traveled to the nation’s capital to convince Congress not to impose a luxury tax on the automobile. They successfully argued that the automobile is a necessity of American life, not a luxury. From that experience was born the National Automobile Dealers Association. Today, NADA represents nearly 16,000 new-car and -truck dealerships with 32,500 franchises, both domestic and international. For more information, visit www.nada.org.

 
Quotable
"Customers ultimately determine the winners here; you have to keep that in mind. We get caught up in a lot of the regulations and technology, but you have to think about the customer."

   
-- Tom McCarthy, Ford’s chief engineer of engine research and advanced technologies, referring to future powertrain options, WardsAuto, April 24


 

NADA - National Automobile Dealers Association

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